United States: Tax Policy Update - 13 October 2014

Last Updated: October 17 2014
Article by Russell W. Sullivan and Danielle R. Dellerson

NUMBER OF THE WEEK: 53

George Clooney's age – can you believe that? More importantly, it's the percentage of Americans who disapprove of the job President Obama is doing according to the latest Gallup poll. With 21 days left until the midterm elections, Obama's low approval rating continues to be a liability for Democrats in competitive races across the country. All eyes are on the Senate races in Lousiana, Arkansas, and Alaska. Democrats must eke out a victory in at least one of these states in order to maintain control of the Senate.

LEGISLATIVE LANDSCAPE

Koskinen: Pass Extenders ASAP. Congress needs to act on tax extenders as soon as it returns for the lame-duck session in November to avoid delays in the 2015 tax season and the processing of tax refunds for millions of taxpayers, according to a letter from Internal Revenue Service Commissioner John Koskinen sent to Senate Finance Committee Chairman Ron Wyden (D-OR) last week.

Wyden issued a statement in response, calling on Congress to "act swiftly on these important tax provisions so it can get to work on a comprehensive overhaul of the tax code and lift the fog of uncertainty from taxpayers."

Republicans Ready to Negotiate? We expect to see movement from Senate Republicans to broker an agreement on extenders with their Democratic counterparts during the lame-duck session—regardless of the outcome of the midterm elections. Parameters of such a deal are not yet known, but there is a growing sense among Republican leaders and tax writers that putting off extenders until 2015—when many expect the GOP will hold majorities in both houses of Congress—would do too much economic and political damage.

Dynamic Scoring: Voodoo or Must-Do? New York Times columnist Paul Krugman recently wrote that we may "find ourselves in deep voodoo" if Republicans take over the Senate and use their control of both houses of Congress to change the legislative scoring rules used by the nonpartisan Joint Committee on Taxation (JCT). Krugman's pun refers to "voodoo economics," the derisive term used to describe Ronald Reagan's 1980 campaign contention that lowering top marginal tax rates would spur economic growth, paying for the cuts by making up for the lost revenue. The Tax Foundation provided an immediate critique of Krugman's analysis and a defense of so-called dynamic scoring, available here.

Rep. Paul Ryan (R-WI), the most likely successor to the helm of the House Ways & Means Committee in the next Congress, has declared his intention to change the JCT's scoring protocols to include the "macroeconomic effects" of tax reform proposals—which is a way to plug dynamic scoring without uttering a phrase that immediately raises political hackles. The Tax Policy Center also has an interesting take on the political dynamics of dynamic scoring, available here.

REGULATORY WORLD

Just the FATCA. The Securities Industry and Financial Markets Association (SIFMA) hosted a symposium Oct. 6 and 7 to discuss the intricacies and implementation of the Foreign Account Tax Compliance Act (FATCA) rules. Panels focused on a diverse array of topics, including the future of FATCA, its impacts on global capital markets and the operational challenges of compliance. One highlighted issue was the key differences between the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-Operation and Development (OECD) and the standard developed under FATCA. The U.S. took the initiative for worldwide information sharing with FATCA, but the OECD's reporting standard is different to reflect its applicability on an international scale. Because of the differences, the CRS and FATCA are not wholly compatible. One panelist saw this as a "high-profile issue" that needs legislative action to conform FATCA to the CRS. While the administration has proposed rules to conform with the CRS, Congress has not acted on it yet.

Dividend Equivalent Rule Set for End of Year Completion. Also during the FATCA symposium, an IRS official said that the agency is working to finalize rules aimed at curbing the ability of foreign investors to skirt the withholding tax on dividends under tax code Section 871(m) by the end of 2014.

EU Ministers Set to Vote on FATCA-Inspired Reporting Measures . European Union finance ministers are expected to vote Oct. 14 on a measure modeled after FATCA provisions requiring the automatic exchange of data about dividends, capital gains and other income generated from assets held in financial accounts. The EU measure also incorporates the Organization for Economic Cooperation and Development's (OECD) common reporting standards (CRS) that the OECD adopted in July. The measure requires unanimous consent of the 28 member states, and BloombergBNA reported that consensus is expected, according to an anonymous EU diplomat.

COURTS & LEISURE

Former Swiss Bank Exec on Trial. In a pivotal case for the U.S. Department of Justice's anti-tax evasion program, the trial of Raoul Weil, a former top executive with Swiss bank UBS, begins tomorrow in a South Florida federal court. Weil is accused of overseeing the bank's program that helped 20,000 American clients hide $20 billion from the Internal Revenue Service (IRS). Those accusations led to a 2009 settlement agreement in which UBS paid a $780 million fine and turned over thousands of American clients' names to U.S. authorities. Read more here.

LOOKING AHEAD

There are no relevant agency meetings scheduled for this week.

Congress is still out on the campaign trail, returning the week of Nov. 12.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions